The transfer of information over computer networks has become an increasingly important means by which institutions, corporations, and individuals do business. Computer networks have grown over the years from independent and isolated entities established to serve the needs of a single group into vast internets which interconnect disparate physical networks and allow them to function as a coordinated system. Currently, the largest computer network in existence is the Internet. The Internet is a worldwide interconnection of computer networks that communicate using a common protocol. Millions of computers, from low end personal computers to high end super computers, are connected to the Internet.
The Internet has emerged as a large community of electronically connected users located around the world who readily and regularly exchange significant amounts of information. The Internet continues to serve its original purposes of providing for access to and exchange of information among government agencies, laboratories, and universities for research and education. In addition, the Internet has evolved to serve a variety of interests and forums that extend beyond its original goals. In particular, the Internet is rapidly transforming into a global electronic marketplace of goods and services as well as of ideas and information.
This transformation of the Internet into a global marketplace was driven in large part by the introduction of an information system known as the World Wide Web (“the web”). The web is a unique distributed database designed to give wide access to a large universe of documents. The database records of the web are in the form of documents known as “pages”. These pages reside on web servers and are accessible via the Internet. The web is therefore a vast database of information dispersed across countless individual computer systems that is constantly changing and has no recognizable organization or morphology. Computers connected to the Internet may access the web pages via a program known as a browser, which has a powerful, simple-to-learn graphical user interface. One powerful technique supported by the web browser is known as hyperlinking, which permits web page authors to create links to other web pages which users can then retrieve by using simple point-and-click commands on the web browser.
The pages may be constructed in any one of a variety of formatting conventions, such as Hyper Text Markup Language (HTML), and may include multimedia information content such as graphics, audio, and moving pictures. Any person with a computer and a connection to the Internet may access any publicly accessible page posted on the web. Thus, a presence on the World Wide Web has the capability to introduce a worldwide base of consumers to businesses, individuals, and institutions seeking to advertise their products and services to potential customers. Furthermore, the ever increasing sophistication in the design of web pages, made possible by the exponential increase in data transmission rates and computer processing speeds, makes the web an increasingly attractive medium for advertising and other business purposes, as well as for the free flow of information.
The availability of powerful new tools that facilitate the development and distribution of Internet content has led to a proliferation of information, products, and services offered on the Internet and dramatic growth in the number of consumers using the Internet. International Data Corporation, commonly referred to as IDC, estimates that the number of Internet users will grow from approximately 97 million worldwide in 1998 to approximately 320 million worldwide by the end of 2002. In addition, commerce conducted over the Internet has grown and is expected to grow dramatically. IDC estimates that the percentage of Internet users buying goods and services on the Internet will increase from approximately 28% at the end of 1998 to approximately 40% in 2002, and that over the same period of time, the total value of goods and services purchased over the Internet will increase from approximately $32.4 billion to approximately $425.7 billion.
The Internet has emerged as an attractive new medium for advertisers of information, products and services to reach consumers. However, the World Wide Web is composed of a seemingly limitless number of web pages dispersed across millions of different computer systems all over the world in no discernible organization. Mechanisms, such as directories and search engines, have been developed to index and search the information available on the web and thereby help Internet users locate information of interest. These search services enable consumers to search the Internet for a listing of web sites based on a specific topic, product, or service of interest.
Search services are, after e-mail, the most frequently used tool on the Internet. As a result, web sites providing search services have offered advertisers significant reach into the Internet audience and have given advertisers the opportunity to target consumer interests based on keyword or topical search requests.
In a web-based search on an Internet search engine, a user enters a search term comprising one or more keywords, which the search engine then uses to generate, in real time, a listing of web pages that the user may access via a hyperlink. The search engines and web site directories of the prior art, however, rely upon processes for assigning results to keywords that often generate irrelevant search results. The automated search technology that drives many search engines in the prior art rely in large part on complex, mathematics-based database search algorithms that select and rank web pages based on multiple criteria such as keyword density and keyword location. The search results generated by such mechanisms often rely on blind mathematical formulas and may be random and even irrelevant. In addition, search engines that use automated search technology to catalog search results generally rely on invisible web site descriptions, or “meta tags”, that are authored by web site promoters. Web site owners may freely tag their sites as they choose. Consequently, some web site promoters or promoters insert popular search terms into their web site meta tags which are not relevant because by doing so they may attract additional consumer attention at little to no marginal cost. Finally, many web sites have similar meta tags, and the search engines of the prior art are simply not equipped to prioritize results in accordance with consumers' preferences.
Search engines and web site directories may also rely on the manual efforts of limited editorial staffs to review web page information. Since comprehensive manual review and indexing of an unpredictable, randomly updated database such as the web is an impossible task, search engine results are often incomplete or out-of-date. Moreover, as the volume and diversity of Internet content has grown, on many popular web search sites, consumers must frequently click-through multiple branches of a hierarchical directory to locate web sites responsive to their search request, a process that is slow and unwieldy from the consumer's standpoint. Thus, the prior art search engines are ineffective for web page owners seeking to target their web exposure and distribute information to the attention of interested users on a current and comprehensive basis.
Furthermore, current paradigms for generating web site traffic, such as banner advertising, follow traditional advertising paradigms and fail to utilize the unique attributes of the Internet. In the banner advertising model, web site promoters seeking to promote and increase their web exposure often purchase space on the pages of popular commercial web sites. The web site promoters usually fill this space with a colorful graphic, known as a banner, advertising their own web site. The banner may act a hyperlink a visitor may click on to access the site. Like traditional advertising, banner advertising on the Internet is typically priced on an impression basis with advertisers paying for exposures to potential consumers. Banners may be displayed at every page access, or, on search engines, may be targeted to search terms. Nonetheless, impression-based advertising inefficiently exploits the Internet's direct marketing potential, as the click-through rate, the rate of consumer visits a banner generates to the destination site, may be quite low. Web site promoters are therefore paying for exposure to many consumers who are not interested in the product or service being promoted, as most visitors to a web site seek specific information and may not be interested in the information announced in the banner. Likewise, the banner often fails to reach interested individuals, since the banner is not generally searchable by search engines and the interested persons may not know where on the web to view the banner.
Thus, the traditional paradigms of advertising and search engine algorithms fail to effectively deliver relevant information via the World Wide Web to interested parties in a cost-effective manner. Internet advertising can offer a level of targetability, interactivity, and measurability not generally available in other media. With the proper tools, Internet advertisers have the ability to target their messages to specific groups of consumers and receive prompt feedback as to the effectiveness of their advertising campaigns.
Ideally, web site promoters should be able to control their placement in search result listings so that their listings are prominent in searches that are relevant to the content of their web site. The search engine functionality of the Internet needs to be focused in a new direction to facilitate an on-line marketplace which offers consumers quick, easy and relevant search results while providing Internet advertisers and promoters with a cost-effective way to target consumers. A consumer utilizing a search engine that facilitates this on-line marketplace will find companies or businesses that offer the products, services, or information that the consumer is seeking. In this on-line marketplace, companies selling products, services, or information bid in an open auction environment for positions on a search result list generated by an Internet search engine. Since advertisers must pay for each click-through referral generated through the search result lists generated by the search engine, advertisers have an incentive to select and bid on those search keywords that are most relevant to their web site offerings. The higher an advertiser's position on a search result list, the higher likelihood of a “referral”; that is, the higher the likelihood that a consumer will be referred to the advertiser's web site through the search result list. The openness of this advertising marketplace is further facilitated by publicly displaying, to consumers and other advertisers, the price bid by an advertiser on a particular search result listing.
U.S. Pat. No. 6,269,361 describes a system and method for enabling promoters to influence a position on a search result listing generated by an Internet search engine for a specified set of search terms. The system and method enable advertisers to specify key search terms to the search engine so as to target their search result list placement to the search queries most relevant to their business. Further, the system and method enable promoters to examine their current search term and placement couplings online and to make substantially instantaneous changes to their selected search terms, placements, and web site titles and descriptions.
In this system, advertisers, or web site promoters, establish bid amounts for search listings with a pay for performance web site or marketplace operator which are chargeable to the advertiser by the marketplace web site operator. In response to a received query from a searcher, search listings are located, arranged according to bid and displayed to the searcher. If a searcher selects or clicks through an advertiser's search listing, the bid amount is charged to the advertiser by the pay for performance web site operator. Advertisers can control the position of their search listing in the search result list by adjusting the bid amount associated with the search listing.
The method described in the U.S. Pat. No. 6,269,361 can be burdensome to manage for an advertiser. In particular, advertisers want to maintain favorable positions in the search results (so as to obtain a high volume of qualified traffic) at a favorable price. The system described in U.S. Pat. No. 6,269,361 provides no ready means to do that. Advertisers can resort to frequent inspection of their ranking on search terms that are important to them, for example by performing a search on www.goto.com. When they observe a change as a consequence of competing advertisers' bidding activities, they can log in to the pay for performance website and change their bids manually in response. In the case where they have been outbid for a position they want to retain, they can increase their bid to retake the position, if the required cost per click (“CPC”), which is equal to the amount of their bid, is one they are willing to pay. In the case where the bid of the listing ranked below theirs has decreased, some advertisers may wish to lower their bid to reduce the amount they pay while still maintaining their position in the results set.
There are many other tasks that advertisers typically perform in addition to managing the position of their listings, including keeping track of the accumulated costs of listings, the number of clicks of listings, the click through rate (CTR) of listings, and checking their account balance. In addition, advertisers have to constantly keep track of the changing marketplace, e.g., to check if the bid of a listing is too high, or if a more desirable rank is now affordable.
Managing the budget is a vital business concern for advertisers, and there is a need to keep track of the breakdown of expenses for different terms. For example, around Father's Day, the number of searches for the term “tie” may increase, resulting in going over budget. Alternatively, the costs may decrease following Father's Day, and the additional funds could be allocated to other terms.
Advertisers must also keep track of the number of clicks that a listing is getting, e.g., to calculate the conversion rate. If a listing is getting many clicks but few sales, then it could be the case that the listing's description is not sufficiently specific. Alternatively, if a listing is getting too few clicks, it could be the case that other advertisers have entered the marketplace, which has resulted in the listing being at a worse rank than before.
It is also important for advertisers to keep track of the click through rate (CTR) of listings. For example, a new title or description for a listing may result in a lower CTR if it is less clear than what was there before. Keeping track of the CTR ensures that corrective action can be taken promptly.
Advertisers must also keep track of their account balance at the pay for performance marketplace. The balance should never reach zero, in order to ensure continued service without interruption. In addition, it is important to keep track of the account balance to ensure that the budget is spent according to plan. For example, if the balance is going down too slowly in the first week, the advertiser can take corrective action to increase the CPC of listings to get back on track.
There are other marketplace conditions that advertisers must keep track of. These include checking if the bid of a listing is too high for its current rank. For example, an advertiser A1 may set the CPC of a listing to $0.50 for the listing to be at rank 2—advertiser A2 is at rank 3 with a CPC of $0.49. A few hours later, A2 changes the CPC of his listing to $0.45, while still remaining at rank 3. Advertiser A1 can now reduce the CPC of his listing from $0.50 to $0.46, while still maintaining the listing at rank 2.
Advertisers must also keep track of the changing costs in the marketplace for different ranks. A rank that was unaffordable earlier may now become affordable, or vice-versa. For example, advertiser A1 is at rank 5 and wishes to be at rank 3 in order to get higher traffic. The current CPC for rank 3 is $1.00, and the CPC for rank 4 is $0.75. A1 can afford at most $0.80 for this listing. That is, the advertiser's return on investment (ROI) analysis indicates that anything higher will result in a loss. If the advertiser at rank 3 drops out, A1 can jump to rank 3 with a CPC of $0.76, which is within his budget of $0.80.
The previous examples illustrate the various actions that advertisers must perform manually to manage their listings. Some advertisers do these tasks several times a day. Some advertisers have a plurality of employees dedicated to the management of their participation in a pay for placement marketplace, monitoring the positions of their listings and adjusting their bids, managing their budget, etc. The manual process of polling of the status of listings, checking the competitors in the marketplace, and checking the account status is time consuming and wasteful. Only some of these concerns need addressing at a given time. Therefore, a need exists for a method and apparatus for advertisers to manage their listings more effectively.
U.S. application Ser. No. 09/922,028, entitled “System And Method For Providing Place And Price Protection In A Search Result List Generated By A Computer Network Search Engine,” filed Aug. 3, 2001, discloses a system which may be referred to as Price and Place Protection. This application is commonly assigned with the present application and is incorporated herein by reference. In the disclosed system, an advertiser's bid does not establish a fixed CPC. Instead, his bid sets the maximum CPC the advertiser will incur. Further, the disclosed embodiments allow the advertiser to specify a desired rank in the search results displayed to the searcher. The rank of a search listing is the ordinal positioning of the search listing among a group of search listings matching the searcher's search term. Higher or better listed search listings are displayed higher on a page and earlier on a number of pages of search listings. The system of the present embodiments determines the actual rankings and actual CPC's. The listings matching a search may then be ranked in descending order of CPC, with priority among listings of equal CPC by chronological seniority.
If these inefficiencies are not addressed by a marketplace promoter, then an economic incentive remains for advertisers to produce automated services of their own to interact with the account management systems of the marketplace operator to obtain the economic advantage available relative to the limited automated services provided by the marketplace operator. As a further consequence, such a situation provides economic incentive for third parties to produce automated services for advertisers, for a fee, or a cut of the alleged savings produced. This is already happening.